Holidaybreak is planning a further restructure of its tour operator Explore following a 16% fall in demand for adventure trips.
The news comes as Holidaybreak posts a pre-tax loss of £36.6 million for the six months ending March 31 – almost double the same period last year. Its ‘headline’ loss, before costs, was £18.1 million compared with £14.9 million last year. Group revenue was down to £153.2 million compared with £156 million last year.
Holidaybreak traditionally reports a loss in the first half of the year due to the seasonal nature of its campaign and education businesses.
The adventure travel division, which includes Explore, posted a first-half operating loss of £10.8 million compared with £300,000 profit last year on revenues of £44.3 million. Demand has dropped due to the weakness of the pound. Year-on-year sales for adventure travel are down 3%.
The group has already taken out £1 million in operating costs from Explore and plans a further restructure in the coming months to allow the business to trade profitably, even if volumes fall by a further 25%. The operator’s website has also been relaunched to increase online sales and reduce costs.
The group’s other travel divisions have also been hit by the recession. Sales of hotel breaks are 6% down, despite £1 million in costs already being cut from Superbreak, and camping sales are down 1%, following a 4% cut in capacity.
However, hotel sales have improved in recent weeks and sales are now level with last year, thanks to new West End shows such as Oliver! and Sister Act.
Meanwhile, the education division is 95% booked for 2009 and 7% up on sales last year.
Group chief executive Carl Michel said: “The group has performed well in the first-half [of the year], despite being impacted by the recession. The decline in consumer confidence has reinforced the trend towards later bookings, particularly in the camping division.
“We are taking the necessary steps to cut costs and restructure operations, particularly in the adventure travel division. Current trading is in line with management expectations.”